BILL NUMBER: SB 681 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 16, 2015
AMENDED IN SENATE JUNE 29, 2015
AMENDED IN SENATE JUNE 3, 2015
AMENDED IN SENATE MAY 5, 2015
INTRODUCED BY Senator Hill
(Principal coauthor: Assembly Member Mullin)
FEBRUARY 27, 2015
An act to add Section 24446 to the Revenue and Taxation Code,
relating to income taxation, and declaring the urgency thereof, to
take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 681, as amended, Hill. Corporation taxes: deduction: public
utilities.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including gas corporations.
The Corporation Tax Law allows various deductions in computing the
income that is subject to the taxes imposed by those laws, and in
modified conformity with federal law, allows a deduction for ordinary
and necessary expenses carrying on a trade or business. Existing law
provides that no deduction is allowed for any fine or similar
penalty paid to a government for the violation of any law.
This bill would not allow a deduction under the Corporation Tax
Law for expenses or expenditures for plant and equipment
by Pacific Gas and Electric Company that the Public
Utilities Commission determined in a specific decision
should be borne by the shareholders of the utility, and not the
utility's ratepayers, because of the utility's numerous violations of
law relating to the public safety. The bill would additionally not
allow a deduction for amounts that the Public Utilities Commission
ordered Pacific Gas and Electric Company to pay to reimburse the
commission for its costs incurred in investigating and enforcing
violations of law by the utility relating to public safety.
identified in a specific decision relative to the operation of
its natural gas transm ission system pipelines. For any
taxable year for which those expenses or expenditures are paid or
incurred, the bill would require Pacific Gas and Electric Company to
provide with the return a certification, under penalty of perjury,
that none of those expenses or expenditures were taken into account,
directly or indirectly, in determining the amount of income of the
company, or any other related taxpayer, that is subject to
tax under the Corporation Tax Law, for that taxable year. By
expanding the scope of the crime of perjury, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 24446 is added to the
Revenue and Taxation Code , to read:
24446. (a) No deduction shall be allowed for any amount paid or
incurred by Pacific Gas and Electric Company for expenses or
expenditures identified by the Public Utilities Commission in
Decision 15-04-024 (April 9, 2015), "Decision on Fines and Remedies
to be Imposed on Pacific Gas and Electric Company for Specific
Violations in Connection with the Operation and Practices of its
Natural Gas Transmission System Pipelines," relating to any of the
following:
(1) Up to eight hundred fifty million dollars ($850,000,000) in
future gas infrastructure improvements related to transmission
pipeline safety to be paid for by Pacific Gas and Electric Company
shareholders.
(2) Four hundred million dollars ($400,000,000) in bill credits
for the gas ratepayers of Pacific Gas and Electric Company.
(3) Approximately fifty million dollars ($50,000,000) to implement
75 remedies, including, but not limited to, implementation of
pipeline safety remedies and reimbursement of the Public Utilities
Commission for its costs incurred in investigating and enforcing
violations of law relating to the public safety by Pacific Gas and
Electric Company.
(b) For any taxable year for which expenses or expenditures
identified in subdivision (a) are paid or incurred, Pacific Gas and
Electric Company shall provide with the return, for that taxable
year, a certification, under penalty of perjury, that none of those
expenses or expenditures were taken into account, directly or
indirectly, in determining the amount of income of Pacific Gas and
Electric Company, or any other related taxpayer, that is subject to
tax under this part, for that taxable year.
SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SEC. 3. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order for the provisions of this act to be applicable to the
current tax year and to better ensure the effectiveness of decisions
of the Public Utilities Commission protecting the public safety, it
is necessary that this act take effect immediately.
SECTION 1. Section 24446 is added to the
Revenue and Taxation Code, to read:
24446. Section 162(a) of the Internal Revenue Code, relating to
trade or business expenses, in general, shall not apply to the
following:
(a) Expenses or expenditures for plant and equipment by Pacific
Gas and Electric Company that the Public Utilities Commission
determined in Decision 15-04-024 (April 9, 2015), "Decision on Fines
and Remedies to be Imposed on Pacific Gas and Electric Company for
Specific Violations in Connection with the Operation and Practices of
its Natural Gas Transmission System Pipelines," should be borne by
the shareholders of the utility, and not the utility's ratepayers,
because of the utility's numerous violations of law relating to
public safety.
(b) Amounts that the Public Utilities Commission, in Decision
15-04-024, ordered Pacific Gas and Electric Company to pay to
reimburse the commission for its costs incurred in investigating and
enforcing a violation of law relating to public safety by the
utility.
SEC. 2. This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
In order for the provisions of this act to be applicable to the
current tax year and to better ensure the effectiveness of decisions
of the Public Utilities Commission protecting the public safety, it
is necessary that this act take effect immediately.